Scott Barlow
A roundup of what The Globe and Mail's market strategist Scott Barlow is reading this morning on the Web
There are reports this morning that Iran's oil production is ramping up faster than expected, but, besides that, the news couldn't be better for investors in the oil patch.
The International Energy Agency released new estimates showing crude demand is rising faster than expected. This is extremely important. There has been a "push and pull" in oil markets between the bearish influence of short-term oversupply and the bullish implications of an expected balancing of supply and demand – the end of the oil glut- in 2017. The EIA news means this expected balance will happen sooner.
In addition, Bloomberg reports that India's oil demand is set to ramp higher, providing more demand support,
"As living standards improve, the number of Indians buying cars and trucks has risen, boosting gasoline use by 19 percent in April alone from a year earlier. The International Monetary Fund predicts the economy will swell by 7.5 percent this year as Prime Minister Narendra Modi makes business reforms, beating Chinese growth for the first time in a quarter-century.
"India 'reminds me of China a decade ago,' said Amrita Sen, chief oil analyst at London-based consultants Energy Aspects. 'The demand growth is unbelievable.'"
"Global Oil Supplies Moving Into Balance" – Across the Curve, Wall Street Journal
"Outlook for oil brightens as output disruptions erode surplus: IEA" – Reuters
"Oil Addiction Will Put India Into Top 3 Global Guzzlers" – Bloomberg
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Reuters reports that the world's hottest commodity, lithium, is almost entirely unavailable to investors,
"Lithium is the hottest commodity around these days, enjoying spectacular price gains and a blue-sky outlook that's the envy of the natural resource sector. There's just one problem though. It's extremely difficult, and somewhat risky, to gain exposure to the sector. Lithium isn't traded on any major exchange, and doesn't have futures contracts or swaps, thereby cutting out one of the main ways investors gain exposure to a commodity. This means the best way to access lithium's story is through equities, but this isn't as straightforward as it may seem."
"the commodity winner you can't buy: Russell" – Reuters
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This story made me angry,
"People who work in chicken and turkey processing plants run by America's biggest poultry producers are routinely denied bathroom breaks. Because of this, some resort to wearing diapers while they're at work on the processing line, Oxfam America said in a report released Wednesday."
Unfortunately, this story is just an exaggerated example of a pervasive trend. Executives have become so abstracted from their employees, so focused on their own pay packages and shareholders, in many cases they are acting inhuman towards the employees that actually do the work.
"Some U.S. poultry factory workers wear diapers at work because they're denied bathroom breaks" – Boingboing
"The middle class is shrinking almost everywhere" – Marginal Revolution
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Global bond markets are smokingly, dangerously hot, ""In a yield-starved world, where a significant percentage of global government debt is yielding zero or something less, investors are reaching for yield by extending maturities, buying credit, or some combination thereof," said Colin Lundgren, head of fixed income in Minneapolis at Columbia Threadneedle Investments, which managed about $470 billion as of Dec. 31… Japan had no problem selling 30-year bonds Thursday even after they were called the "most overpriced security on the face of the Earth" by hedge fund executive Adam Fisher."
"Investors Fleeing $9 Trillion of Negative Yields Fuel Bond Binge" – Bloomberg
"@lisaabramowicz1 "The demand for fixed income products, seemingly at any price, remains profound." blogs.barrons.com/incomeinvestin… " – Twitter
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Tweet of the day: "@TradeNewsCentre For the 1st time #Mexico beats #Canada as an exporter to the United States opportimes.com/america-del-no… pic.twitter.com/lHGoiByiFC " – Twitter
Diversion: "Why Richer People Spend More Time With Their Friends" – The Atlantic
Scott Barlow